Judge tosses GM settlement on faulty switch

NEW YORK: A federal bankruptcy judge on Thursday said a settlement agreement that would require General Motors Co to pay $1 billion in stock to car owners suing the company over faulty ignition switches was not enforceable. Judge Martin Glenn of the US Bankruptcy Court in New York said the agreement that car owners had reached with a trust that holds many General Motors (GM) liabilities from before its 2009 bankruptcy was not valid without signatures. The claims stem from GM’s 2014 recall of 2.6 million vehicles with defective ignition switches, including one linked to 124 deaths.
Lawyers for the car owners and the trust had agreed to a deal in August, but never signed the agreement. The trust walked away several days later, instead accepting GM’s offer to help pay for the trust’s defence against the car owners’ claims. Glenn blasted the lawyers of the trust in his order, saying their “dishonesty, or bad faith, was not lost” on him. But he said that despite the trust’s last-minute turnabout, applicable law did not allow the enforcement of an unexecuted agreement. Steve Berman, one of the lawyers representing the car owners, in a statement said his side was disappointed but saw a victory in the ruling nevertheless. — Reuters